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March 30th, 2013 6:33 pm
Jindal Raises Sales Tax Estimate Amid Growing Opposition

A new, higher-than-originally-estimated sales tax will be needed to recoup revenue lost if Louisiana legislators adopt Governor Bobby Jindal’s proposal to swap the state’s income taxes on individuals and businesses for an expanded sales tax.

The revision, released by Jindal’s office last Thursday, raised the proposed sales tax rate from 5.88 percent to 6.25 percent, according to reporting by The Times-Picayune of New Orleans.

The timing of the announcement could hardly have been worse.  So far, no business group has mobilized in support of the proposal.  Instead, some of the state’s most influential business associations are opposing the measure because it shifts $500 million in taxable events onto business transactions that are currently exempt.

On the other side of the spectrum, a group of three hundred religious leaders signed a letter to Jindal arguing that the tax swap would amount to a tax increase on the poor.

Even fiscally conservative Republicans are wary because of the administration’s inability to peg a consistent revenue amount if the state moves from income to sales to fund the government.  That skepticism will now grow with Jindal’s higher tax rate, since it looks to some like a tacit admission that previous estimates were overly optimistic.

So far, Jindal appears to be making one of his few missteps in an otherwise very successful run as Louisiana’s governor.

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